Example of a simple trading system

Example of a simple trading system

This example of a system - just an example, and not a recommendation to trade at given rules. If you hurry up, take advantage of these rules, do not assess the feasibility of their application, ie profitability of the system, then the entire responsibility for any loss will be borne by you personally. DC "Akmos Trade" of responsibility for your deal and for the possible loss can not be held, the more it is too simple system of trade which can not be consistently profitable. At the same time, if you have created a system to bring you income, then we will be only too happy for you, in no way claiming to be divided by income.

Currency Pair: EUR / USD

Work interval: 1 hour

The system will be the trend. The main trend of the price determined by the position relative to the simple moving average with a period of 24

Open positions will not when the price crosses the average up or down, and when the indicator is Stochastic (Stochastic) with a period (6,2,1) will show that ended with rollback prices against the trend and renewed movement in the direction of the trend. The signal indicator Stochastic let it be: for sale - quick exit indicator line down from the overbought zone in the central zone (crosses 70%); for purchase - quick exit line upward from oversold zone in the central zone (crosses 30%)

The position will close on the warrants. Stop Loss = 100 points; Take Profit = 200 points. Unveiling the order level is the level of the actual opening

For insurance mean profit Stop Loss order is portable to break even if the price will be 100 points

Fig. 1. EUR, simple trading system, the signal to open a long position 19.12.2008

Figure 1 shows the course of one transaction to 19.12.200. Price is below the moving average. Stochastic out of the overbought zone down, showing that the movement in the trend continued. Opened down the market (manually) at a price 1.4262. The position is closed with a profit at 1.4062 on the same day, 19.12.2008 at take-profit. The result of the transaction 200 points, that lot, for example, 10 000 (0,1) is equal to $ 200, while Lot 30 000 (0, 3) - $ 600.

End example

When the system is created, before trading it must somehow evaluate: if it turns out well - we assume to be executed in the near future, and if the poor - give up or be something in it to change. Of course, the most important parameter of any trading system is income, expressed as a percentage of the deposit. Choosing the trading system, it is necessary to know how many signals it issues at the relevant time frame, how many among them are profitable as unprofitable, what are the average positive and negative average transaction.

For example, if the system for the year was 150 signals, of which 110 signals profitable and 40 unprofitable, we say that this is a good system. However, referring to the average profitable and unprofitable to the average transaction, we find that profitable averaged 7.3 points, which is practically comparable with the spread, and the average was losing 35 points. Significant discordance between the potential profits and potential loss will be for us a ground for rejection of this system, because it leads to an excess of the total loss of gross profit.

Using the trading system is essential for sustainable and profitable work for the foreign exchange market, facilitating trade as a beginners and experienced professionals. With a proven trading system:

You will be able to work calmly, as you will have a clear plan

The results of the trade will be determined by the quality of the system, rather than exposure

Your main task will be to co-operate with Her Majesty the statistics.

Prior to the transactions required to establish such rules for its system to be seen: a steady income for an extended period, even if there are losses in certain transactions

It is important that revenue grew faster than the losses - this principle that underlies the growth of any capital.